Price action: Corn futures ended mixed with September 4 1/2 cents higher but new-crop months around 3 to 5 cents lower. The September contract finished near its highs for the day while new-crop contracts closed near their daily lows.
Fundamental outlook: The fundamental picture did not change much today with intense heat still entrenched across the Corn Belt and only limited chances for relief projected well into next week. Traders continue to try to assess the impact of the heat on the sharply delayed crop but it may take until next week's crop condition update from USDA to sharpen trader focus on crop development.
News weekly ethanol production tallied just 820,000 barrels per day (bpd), down 24,000 bpd from the week prior, tempered gains in September futures. Ethanol stocks fell 232,000 barrels to 16.25 million barrels. But reports spot basis levels remained steady across much of the Midwest lifted the September contract.
Technical outlook: December corn futures drifted lower today but found support at the top of Monday's gap at $4.79. This sets up an important test for Thursday. If support at $4.79 holds, traders will then look again at a retest of the $5.00 mark. If that support fails, traders will look to the bottom of the gap at $4.74 1/2 as the downside target.
Hedgers: 100% sold on 2012-crop in the cash market. 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures saw a very choppy day of trade. The front-month surged into the close to end near the session high with a 19-cent gain. Deferred months closed mid-range with gains of 2 1/4 to 11 3/4 cents.
Fundamental analysis: While soybean futures saw profit-taking at times today, weather concerns and a reminder of strong export demand ultimately resulted in a firmer close for the bean market. Temps continue to challenge record highs in the Corn Belt and rain has yet to fall, likely causing some pod abortion and diminishing the crop's yield potential. As a result, some private crop watchers have lowered their estimates. And the forecast calls for more hot, dry weather to start the month of September.
On the export front, USDA's announcement China bought 120,000 MT of new-crop beans reminded the market of tight carryover supplies and ongoing demand strength.
Technical analysis: November soybean futures settled near the midpoint of today's trading range and this week's range. Support remains at the June high of $13.33, while the psychological $14.00 level marks resistance.
Hedgers: 50% of expected 2013-crop production is sold via a forward-price cash contract for harvest delivery. 100% sold on 2012-crop in the cash market.
Cash-only marketers: 50% of expected 2013-crop production is sold via a forward-price cash contract for harvest delivery. 100% sold on 2012-crop in the cash market.
Price action: Wheat futures favored the upside for much of the morning, but the markets softened into the close. SRW finished roughly 4 cents lower, while HRW wheat closed steady to a penny lower. HRS wheat held onto fractional- to 4 3/4-cent gains.
Fundamental analysis: Wheat futures enjoyed light buying interest today on news unknown destinations purchased 119,000 MT of U.S. wheat -- 40,000 MT for 2013-14 and 79,000 MT for 2014-15 delivery. HRS wheat continues to benefit from concerns about harvest delays.
But countering this news was the results of an Egyptian tender. The country bought a total of 295,000 MT of Russian, Ukrainian and Romanian wheat, reminding traders of stepped up export competition due to an increase in global wheat supplies this year. Strength in the U.S. dollar index and pressure on the corn market added to the negative tone.
Technical analysis: December SRW wheat futures continue to chop within Monday's wide trading range. Monday's high of $6.76 1/2 marks resistance, while strong support stands at the contract low of $6.35 1/2.
Hedgers: 50% of 2013-crop is sold in the cash market. 100% sold on of 2012-crop.
Cash-only marketers: 25% of 2013-crop is sold. 100% sold on 2012-crop.
Price action: Cotton futures were choppy today, but futures drifted lower into the close to finish 34 to 54 points lower through the July contract, with far-deferreds ending 13 points lower.
Fundamental analysis: Futures benefited from short-covering in the early going, but buying was limited by strength in the U.S. dollar index and recent improvements to the condition of the cotton crop. Buying was also limited by a lack of other fresh news and ideas that export demand remains lackluster.
But pressure is also being limited by reports of heavy rain in India that raise quality concerns as well as near-term supply concerns due to delayed harvest.
Technical analysis: December cotton futures posted a weekly low of $83.71 cents, but the contract respected support at the mid-July low of 83.58 cents. Dropping below that level could trigger sell stops and make bears' next target the June low of 81.72 cents.
Hedgers: 50% of expected 2013-crop production is hedged in December cotton futures at 83.87 cents. 50% of expected 2013-crop production is also sold via cash forward contract for harvest delivery. 100% sold on 2012-crop in the cash market.
Cash-only marketers: 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery. 100% sold on 2012-crop.